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This is the situation, for example, in the United Kingdom, Italy and in France.

In a few countries, prostitution and operating a brothel is legal and regulated. Most of these countries favor brothels, at least in theory, as they are considered to be less problematic than street prostitution.

A brothel is a place where people may come to engage in sexual activity with a prostitute.Technically, any place where prostitution commonly takes place is a brothel, but in places where prostitution or the operation of brothels is illegal, establishments may attempt to disguise their involvement in prostitution by referring to their business as something else, such as a massage parlor, a bar, or a strip club. Brothels are legal only in some parts of the world, though some illegal brothels may be tolerated.Although the Dumas Hotel in Butte, Montana operated legally from 1890 until 1982, brothels are currently illegal throughout the United States, except in rural Nevada; prostitution outside these licensed brothels is illegal throughout the state.All forms of prostitution are illegal in Clark County, which contains the Las Vegas–Paradise metropolitan area.Prostitution and the operation of brothels is illegal in many countries, though known illegal brothels may be tolerated.

Such situations exist in many parts of the world, but the region most often associated with these policies is Asia.

However, the existence of licensed brothels does not stop illegal brothels from existing.

According to a report in the Daily Telegraph (Australia), illegal brothels in Sydney now outnumber licensed operations by four to one; according to a 2009 report, in Queensland only 10% of prostitution happens in licensed brothels, the rest remains either unregulated or illegal.

In the European Union, there is no uniform policy and no consensus on the issue; and laws vary widely from country to country.

Netherlands and Germany have the most liberal policies; in Sweden (and in Norway and Iceland outside the EU) the buying, but not selling, of sex, is illegal; in most former Communist countries the laws target the prostitutes; while in countries such as the UK, Ireland and France the act of prostitution is not itself illegal, but soliciting, pimping and brothels are, making it difficult to engage in prostitution without breaking any law.

The Netherlands has one of the most liberal prostitution policies in the world, and attracts sex tourists from many other countries.